Question 1

What is GUSD?

Accepted Answer

GUSD is the ticker for Gemini dollar, a U.S. dollar-backed stablecoin issued by Gemini. It represents U.S. dollar value as a token that can be transferred on a blockchain and used in crypto applications, rather than as a crypto asset primarily intended to rise in price. GUSD is built on Ethereum and uses the ERC-20 standard. This standard enables compatible wallets and smart contracts to process it according to token rules, but whether a particular wallet, trading platform, or application actually supports GUSD still depends on that service's own support scope.

Question 2

How does GUSD maintain its target peg to the U.S. dollar?

Accepted Answer

GUSD targets 1 token to 1 U.S. dollar; its basis is not algorithmic adjustment, but U.S. dollar reserves corresponding to the circulating supply. Gemini states that every GUSD in circulation is fully backed by cash or cash equivalents it holds. This arrangement provides the basis for 1:1 redemption: customers who meet Gemini's service conditions can redeem 1 GUSD for 1 U.S. dollar at Gemini. It does not mean that all secondary markets will trade at exactly 1 U.S. dollar at every moment, because market execution prices remain affected by buy-and-sell liquidity and trading conditions.

Question 3

How is GUSD minted and burned?

Accepted Answer

When customers exchange U.S. dollars for GUSD, Gemini mints the corresponding amount of GUSD on Ethereum and retains the U.S. dollars under a reserve arrangement in segregated accounts. Minting increases the on-chain supply while the corresponding U.S. dollars enter the reserves. When customers request to exchange GUSD back for U.S. dollars, Gemini burns the redeemed tokens and returns U.S. dollars. Burning reduces the circulating supply; therefore, minting and burning are two opposite steps through which the token quantity changes with U.S. dollar exchanges and redemptions.

Question 4

What makes up GUSD's reserves?

Accepted Answer

Gemini lists GUSD reserve assets as deposits held at banks insured by the U.S. Federal Deposit Insurance Corporation (FDIC), money market funds investing only in U.S. Treasury obligations, and U.S. Treasury obligations. The reserve composition describes categories of backing assets; it does not mean token holders directly own those assets. Gemini also states that the cash portion of the reserves may qualify for FDIC “pass-through” insurance under certain bank circumstances; eligibility and coverage depend on the relevant arrangements and conditions, and this cannot be summarized as unconditional insurance for all GUSD or all losses.

Question 5

What does a monthly reserve attestation verify?

Accepted Answer

A GUSD reserve attestation is an independent examination of whether the reserve amount at a specified date and time matches the amount of GUSD in circulation. Gemini first makes this reserve assertion, and the independent accounting firm BPM LLP gathers evidence and issues an opinion on that assertion. Gemini publishes monthly attestations and states that BPM LLP also conducts an attestation check on one randomly selected business day each month. Attestations help users understand reserve matching at a specified time, but do not replace users' assessment of the issuer, redemption eligibility, custody arrangements, and market risks.

Question 6

What should be confirmed when using or transferring GUSD on-chain?

Accepted Answer

GUSD can be transferred as an ERC-20 token on Ethereum and used in supporting applications for trading, payments, or interactions with smart contracts. On-chain transfers generally require using the Ethereum network and paying the Gas fees required by that network; fees are not fixed by the label “transferring GUSD” and may vary with Ethereum network conditions. Before transferring, confirm the recipient address, the selected network, and whether the counterparty service supports GUSD. ERC-20 compatibility indicates consistency of the technical format; it does not guarantee that assets sent to the wrong network, the wrong address, or a service that does not support GUSD can be recovered.

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